Mr. Alan Dukes:

Chairman, could I just add one or two reflections to that as a kind of a non-banker? As I said earlier on, the information was there about the concentration of risk by sector, and by borrower, and it was there available to the regulatory authorities.

The second point I would make is that I think this was common cause for most of the banks. If they were asked about their loan exposures in the property sector they would have said, and probably would have believed, that they operated a 70% loan-to-value ratio. On deeper examination I found, and this is making it very broad - this is broad brush kind of stuff - if you really examined their loan books, and tracked through individual borrowers, you would find that in a number of cases, and a not insignificant number of cases, the 30% equity that was supposed to go with this 70% loan-to-value ratio was borrowed funding either from the one bank or from another bank and brought in as equity to support a loan. So that, in fact, the concentration by sector and by borrower was actually exacerbated by the loan-to-value ratios that actually existed in real terms. The first two parts of that were information - if you like, gross level information - that was available to regulators and that should have set off alarm bells. Regulators should have said "Stop, you are over concentrated." The last bit of it was much more difficult to find out and that was partly related to the design of the bank systems and the kinds of things that Mr. Aynsley has been talking about.